Filing Bankruptcy To Keep From Foreclosure
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by: MaxwellSmithson
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Some people, when faced with the choice between foreclosure and bankruptcy, are not sure which is the right one to choose. Few people realize how difficult the choice is to make, or recognize that the decision is not an either/or one.
The only way to stop this is to pay the mortgage lender. Most people realize how important it is to make your car payments on time every month, if you do not want to have your car repossessed. Similarly, an individual may lose their home through foreclosure if they do not keep up with the monthly payments on their mortgage.
For people who cannot pay their debts, sometimes they file the legal action of bankruptcy. This will put an end to the civil actions being filed against the debtor during the time they are in bankruptcy. This means that the mortgage lender cannot continue through with their legal actions, including a foreclosure.
However, a mortgage lender can file for relief from the automatic stay, and when the relief is granted, simply proceed with the aforementioned action. The bottom line is that bankruptcy does not stop foreclosure and it does not allow a debtor to keep a house without paying the mortgage lender. While it cannot stop the action, bankruptcy can slow it down.
Occasionally, however, foreclosure is prevented through bankruptcy, as the latter gives person additional time in which to pay the lender and usually makes the paying easier. As bankruptcy makes a mortgage lender temporarily cease a foreclosure action, a debtor has additional time to raise money to pay the lender. The debtor may also have have several of their other debts eliminated due to bankruptcy, so they are able to have additional money available to pay their mortgage. In terms of a chapter 13 bankruptcy, the courts will dictate that the payment of the overdue mortgage needs to be paid through several payments, which will further give the debtor time to pay the lender off.
In order to file for bankruptcy, you must first qualify - which not everyone does - and even if you do, you will be faced with large legal fees. Legal bills can be quite high, and high enough that they outweigh the costs of catching up with the mortgage. If you think that bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. No one should attempt a complicated legal process like bankruptcy without legal aide. This article is only intended to give general information, so for more detailed information, contact a lawyer in your state.
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